For Partners

① The implementation of vision embodies 「provision of a competitive edge of the best in the industry ranging price, quality, delivery to service for stakeholders of the Purchase Department」

② It should respond to market fluctuations in flexible manner, and provide with materials and services to meet needs of the internal and external customers by securing the most competitive network of supply.

(2) Role s and responsibility of the Purchase Department

① With the fair competition system in place, it explores suppliers for selection, making a survey of competitors/ other player in the same industry (including on their purchasing system, supplying system and purchasing cost) and supplies prices, qualities, delivery and service of the best value after terms of the purchase are negotiated.

② It develops a strategic suppler who has the potential with competitiveness and deserve growth with partnership, and nourishes them through evaluation, management and assistance.

③ Total Cost of Ownership (TCO): It continuously develops a purchasing technique for application in order to make the most competitive purchase within the context of TCO.

④ It complies with laws and rules governing the courtiers where the company makes a business, and engages in all the purchasing work in ethical and fair manner.

⑤ It continues to improve the purchasing related system and process system in place in an aim to achieve the vision and mission, and fulfilling its role and responsibility in the face of internal and external market fluctuations.

Scope of purchase guidelines

(1) The guidelines of purchase is to generally regulate its measures of purchase, and the all regulations shall be applied preferentially and equally unless there is a regulation with separate indication.

(2) The scope of purchase activity includes purchase and borrowing all the tangible and intangible assets including materials, products, facility and service necessary for business activities.

(3) Following organization and its employees directly and indirectly associated with purchase activity

① The company and its overseas corporations

② A company representing a purchase based agreement with the company

③ A subsidiary with 50% of its shares possessed by the company

④ A company on which the company has a right to manage

Process and implementation of purchase

(1) Standard purchase process

① In principle, a purchasing activity includes the 5 step-key processes such as sourcing, selection of suppliers, negotiation, contract and management of suppliers accordingly.

② A sourcing is a step for developing a supplier to create the best values in the ranges of purchasing including price, quality and delivery and service within the context of total cost of ownership after understanding characteristics of markets by materials, products, facility and service and supply situations.

③ The selection of suppliers refers to a step for choosing the optimal supplier through bidding from suppliers with certain qualifications.

Code of ethics for purchase

(1) Full understanding of code of ethics with compliance

All the employees must comply with laws and regulations on purchase governing the region, and process it in ethical and fair manner. All the employees of the Purchase Department must fully understand and comply with code of ethics by the company at all times.

(2) Fair Trade

① All the purchasing trades shall be made under the fair competition system.

② Trade with small business In its trade with small business, it must provide it with equal opportunity to participate, comply with the following related laws and regulations and seek mutual development for coexistence based on mutual trust and cooperative relationship through transparent and fair trade.

* Laws and rules on monopoly regulations and fair trade, on fair trade with contractors and on promotion of coexistence and cooperation between large and small businesses and other related laws on the industry.

(3) Compliance by suppliers with ethics

In principle, they should recognize a corporate’s social responsibility, and trade with sound suppliers in compliance with related laws and rules. In its trading with the company, a supplier must clearly aware of code of ethics that it complies with, and create a transparent relationship for coexistence.

Growth with partnership by Daewoo Electronics

(1) Concepts of growth with partnership

Under the principle that it can pursue mutual interests and developments with all the suppliers in the business relationship, it should establish a policy for business management of suppliers for implementation.

(2) Principles of business

① All the business with suppliers must be fair.

② The company should try to ultimately provide all the stakeholders with better values by listening to different opinions by suppliers at all times, and a new and creative idea that may reduce costs and increase profits.

③ The company should continue to improve the overall elements of competitiveness in terms of the purchase process of price, quality, delivery and service as well as specialization in purchase in cooperation with suppliers in an attempt to produce more increased performance in the face of the new business environment.

④ The company should try to establish better strategy for management of suppliers to drive a potential in the future and creation, and reflect their ideas and capabilities starting from the very stage of product development.

⑤ The suppliers must be selected based on its competitiveness and capabilities regardless of nationality, regions, races, religions, sexes and social backgrounds (such as backgrounds of education and family)

(3) Cultivation and support of suppliers

① With incentives or penalty according to internal procedures based on evaluations, it should be rationally applied, providing suppliers with motivation for improvements in performance.

② According to purchase policy and internal procedures by the company, it should take measures to nurture and support suppliers, who are qualified with high potential for growth and coexistence with business consulting, capital finance, training and establishment of information infrastructure.

(4) Klasse Family

① To promote mutual interests and developments through information exchanges and mutual cooperation with suppliers, it runs “Klasse Family”, a council of suppliers.

② Members of the council are selected as a supplier that is to be strategically nurtured. For activities and support methods of the council, they should be regulated separately from purchase policy of the company.

③ Members of the council should promote coexistence with improvements either together by the parent company or by members in cost reduction through joint technology development, and increased quality and production.